BPPDAN Backgrounds

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On 11 February 1992, the government passed Law No. 2/1992 on insurance business which is equipped with PP 73/1992 as well as implementing various KMK. With the enactment of the Act, the WCL PP and then ended the tariff regime (Fire) previously applicable (KOTAP Fire Insurance) so that the provisions of the tariff is regulated by KOTAP no longer mandatory.

That places an unhealthy price competition as market participants have not fully understand and implement the provisions of the Act, Regulation and KMK relating to the determination of insurance premiums and there are constraints in meeting the provisions relating to the risks and loss profiles as a basis for setting premiums.

On September 8, 1992, all Members of the DAI general insurance sector signed Collective Agreement (ICA) of the Fire Insurance Premium Rate Tariff – but ICA is not running as it should.

In 1996, DAI Member general insurance sector back signed as a revision to the ICA ICA 1992 which is expected to improve the conditions of price competition is getting worse.

BPPDAN created by the Notary Miriam Magdalene Indrani Wiardi SH on the basis of the Inter Company Agreement (ICA 1992).

ICA 1992 is mutual agreement between the members of the DAI sectors Losses on Fire Insurance Premium Rate Tariff Indonesia. Mutual consent and was attended by 91 companies signed Insurance and Reinsurance Company 3 on 8 September 1992.

Decisions taken in the Collective Agreement are as follows:

1. Applied premium rates which amount is at least 60% for Industrial Risks and 80% for Non Industrial Risks of Fire Tariff insured Indonesia prepared and issued by DAI DAI through circular no. 263. / DAI / 89 dated March 27, 1989.

2. The provisions above (1), applies only to objects with coverage up to USD. 75,000,000.00 per risk and for objects larger than the USD. 75,000,000.00 is advisory.

3. Policy and the applicable clause is Standard Fire Policy of Indonesia and set clauses DAI.

4. For Insured Industrial / Property / Commercial All Risks All Risks policy will apply specified DAI.

5. All parties to this agreement have agreed to form a joint center with the purpose of collecting statistical data accurate information for the purposes of Tariff Bureau.

6. To carry out the purposes referred to in point 5. then formed Data Center Management Agency National Insurance which main task is to assist and finance Tariff Bureau. Data Center Management Board appointed by the meeting of the National Insurance Members Losses DAI sector. All members of the DAI sectors of sessions required to provide statistical loss of 2.5% but not greater USD. 500,000.00 each risk closure to BPPDAN which can be reviewed at any time. For a given current reinsurance commission of 20%.

7. Duties and obligations BPPDAN as follows:

  1. Creating statistics for the manufacturing rate.
  2. Conduct surveillance on offense first use policy and / or clauses and violation rate.
  3. Collecting and studying the cases that arise in connection with the use of policy and or clause-klausulanya and report it to DAI. With the ICA in 1992, the statistics session compulsory at 2.5% but not more than USD. 500,000.00 to BPPDAN and running s / d in 1996
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